Wage Theft At The Reagan Building: Our Tax Dollars At Work

Terrance Heath

Think of it as a two for one deal. Not only do our tax dollars subsidize low wages, but taxpayers also subsidize the wage theft that usually goes hand in hand with low-wage work. At least, that’s what workers at the Ronald Reagan building in Washington, DC are claiming in a complaint filed with the Labor Department.


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Tuesday marks 75 years since President Franklin D. Roosevelt signed the Fair Labor Standards Act into law, but a new workers-rights group gave the government little reason to celebrate on the eve of that anniversary.

Good Jobs Nation filed a complaint with the Labor Department on Monday, alleging wage theft against at least 30 workers by food vendors in federal facilities.

The group claims eight franchises doing business at the Ronald Reagan Building and International Trade Center in Washington have paid employees below the federal minimum wage and ignored rules on overtime pay.

Each of the businesses operate under license agreements with Trade Center Management Associates, a company that contracts with the General Services Administration, according to the complaint.

That arrangement puts two degrees of separation between GSA and the alleged offenders, but it doesn’t mean the agency, which is still rebounding from past contracting and conference-spending abuses, can brush off the complaint.

It’s bad enough that our tax dollars are funding low wage work, allowing federal contractors to pay their CEOs an average of $760,000.00 for work on a federal contract, while paying many of their workers low wages, and even less than the minimum wage in some cases. It’s worse that our tax dollars effectively subsidize wages so low and “unlivable” that workers can’t afford the basics, and have to food stamps and other forms of welfare. Wage theft just adds insult to injury.

What’s wage theft? As Interfaith Worker Justice executive director Kim Bobo explained to OurFuture.org’s Isaiah J. Poole, it’s when employers don’t pay workers the wages they deserve.

According to the National Consumers League, there are six ways that employers typically go about stealing from their employees:

  • Not paying overtime. Unless classified as exempt, workers are entitled to overtime pay (usually time-and-a-half) for any work that exceeds 40 hours a week. Employers, as the Reagan building workers claim in their complaint, simply ignore the rules and don’t pay their workers the overtime pay they’re due.
  • Misclassifying employees. Employers classify employees as “independent contractors,” thus denying the benefits and protections guaranteed to company employees – including worker’s compensation, payroll taxes paid by the employer, and unemployment insurance.
  • Violating minimum wage law. Between federal, state, and local minimum wage laws, workers are entitled to receive which ever is the highest rate of pay. As the Reagan building worker’s complain shows, employers simply ignore minimum wage laws and pay they employees below the mandated minimum wage.
  • Working off the clock. When you’re paid by the hour, working off the clock means working for free. That’s exactly what many employers demand of their employees, by requiring them to work before and after set working hours, without additional pay. (See “Not paying overtime.”)
  • Taking illegal deductions from pay. Usually, getting a job is something you do to make money, not something you have to pay money for. Some employers make workers pay for uniforms they’re required to ware at work, by deducting the costs from worker’s paychecks. The same goes for job-related trainings.
  • Just not paying. Usually, when you provide labor for an employer, you get paid for it. Employers may not pay employees for all hours of work (including travel to and from work), not paying employees for days of work, not paying an employee his or her last paycheck. (Usually related to taking illegal deductions. See above.)

Wage theft is running rampant in this “post recession economy.” That’s because it’s basically a “No Quit” economy, in which the job market is so abysmal and unemployment high that workers can’t or won’t quit their jobs for fear of being unable to find another one. Under those conditions, workers will put up with a lot, because they need their jobs more than their employers may need them, with so many unemployed and long-term unemployed people willing to do the same work for less pay and fewer benefits. And employers know it.

Low wage workers are particularly vulnerable, because they really need their jobs, and may have few prospects for finding other work. As I noted in a previous post, A Fast Food Forward report showed that 84 percent of New York City’s fast food workers experienced wage theft in the past year, including all the forms mentioned above.

The workers in the Reagan building probably what the same thing anyone which a job wants: an honest day’s pay for an honest day’s work. What could be simple, or more American, than that?

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